India’s steel sector has witnessed remarkable growth in the last decade, positioning itself as the second-largest steel producer in the world. With a production output of 140.2 million tonnes of crude steel in 2023, the industry is steadily moving towards the government’s target of 300 million tonnes by 2030 and 500 million tonnes by 2047. This growth aligns well with the “Make in India” initiative, which aims to make India a global manufacturing hub. But the key question remains: can Indian steel manufacturers meet global competition while maintaining growth and quality?
Rising Production and Demand
India's steel demand is projected to grow at a robust 8% annually in 2024 and 2025, largely driven by public infrastructure projects, housing, and the automotive sector. Per capita steel consumption has almost doubled from 59 kg in 2013–14 to 119 kg in 2022–23. This indicates strong domestic momentum and a growing appetite for steel-backed development.
However, the international scenario is more complex. Global steel players, particularly from China, South Korea, and Japan, have increased exports of low-cost steel. In 2024, India became a net importer of finished steel for the first time in several years, with imports touching a nine-year high of 9.5 million metric tonnes. This has severely impacted domestic steelmakers, some of whom reported up to a 91% fall in profits in FY24–25.
Government Support and Trade Measures
To protect the domestic industry, the Indian government recently introduced a 12% temporary tariff on certain steel imports. Additional discussions around imposing safeguard duties are also ongoing. These measures are critical in ensuring a level playing field for Indian manufacturers, especially as global competition intensifies.
At the same time, government schemes such as the Production Linked Incentive (PLI) for Specialty Steel and the National Green Mission are helping the sector pivot towards higher-value products and sustainable practices. These initiatives encourage innovation, support cleaner technologies, and enable Indian firms to compete in premium global markets.
Sustainability and Technology Challenges
Globally, there is a strong push towards reducing carbon emissions in steel production. India’s steel sector, which still relies heavily on blast furnaces and coal, must adapt quickly. The adoption of electric arc furnaces and green hydrogen is essential if India wants to remain relevant in international markets that are increasingly demanding “green steel.”
Many companies are beginning to invest in energy-efficient processes, but broader industry change will require support in the form of financing, policy direction, and technical training.
Infrastructure and Cost Competitiveness
Logistics remains a major hurdle. India’s freight cost from Jamshedpur to Mumbai can reach $50 per tonne—much higher than international routes like Rotterdam to Mumbai, which cost about $34 per tonne. Improving domestic infrastructure under schemes like the PM Gati Shakti National Master Plan is vital to reducing operational costs and making Indian steel more competitive on the global stage.
Additionally, India must find ways to balance increasing production capacity with actual market demand. Overcapacity not only strains the supply chain but also leads to price volatility and reduced investment.
A critical enabler in this landscape is the low global cost of capital and improved access to long-term debt and bond instruments. Indian steelmakers can benefit from this favorable financial environment to fund capacity expansion, upgrade technologies, and invest in sustainability measures. Public markets are also showing greater receptivity to capital issues, offering additional avenues for raising funds. Leveraging these financial conditions effectively will be essential for Indian steel players to enhance their global competitiveness and long-term resilience.
The Road Ahead
Despite global headwinds, Indian steelmakers have a real opportunity to become world leaders. Our strengths, skilled manpower, a growing domestic market, and government support provide a strong foundation. But to meet the global challenge, the sector must move beyond protectionist measures and embrace innovation, sustainability, and long-term competitiveness.
The “Make in India” initiative will succeed in steel if we think globally while acting locally. With the right policies and industry commitment, Indian steel can not only compete but also lead the world in quality, scale, and responsible growth.
